How I Dreaded Finances….Until We Discovered This One Simple Technique

Income five dollars and expenses six dollars: misery

Income four dollars and expenses three dollars: happiness

- Charles Dickens, David Copperfield

Research shows finances as second only to sex in causing marital dissatisfaction. I feel like finances can make or break a marriage pretty easily. For us, though our finances weren’t in dire straits, finances were still a pretty big topic of frustration. It was an easy way to get “irked” with one another. I was adamant that I didn't want to have a budget where I had to account to him for every dollar, but he needed me to work within parameters. Like the picture below, the parameters turn confusion into a clear vision. I want to help you do that with finances.

Coming to the Solution

Finally, just last month we sat down with Amber, my mentor, and met the frustration head-on. You know what happened? I realized he was willing to give me everything I wanted—he would pay the bills and then give me what is left over to meet our family’s needs as I chose. He is glad because this financial plan changed my mindset; whereas before I would say “can’t I buy this AND this?” and I did not want to be accountable, now I am aware that there is a limit, but within this limit, I can choose to spend (happily!) on whatever I feel like will benefit our family most. I don’t feel like a martyr having to save pennies here and there, yet I’m motivated because a penny saved stays under my stewardship. I feel free. Capisce? It’s a WIN WIN!!!

Overview:

I'll explain how this baby works (disclaimer: these are not our real numbers)

HIs Stewardship

Everything under his stewardship is on the right column. He understands that I have a lot on my plate with our house and two toddlers — I really appreciate that. He is willing to pay the bills, tithing, cell phone bill, car payment etc. I don’t worry about those things, I just know they will auto withdraw from our joint account or he will put them into the savings account for safe keeping (emergency fund and savings).

FUN MONEY

*There is one small exception to that rule, and that is the “Fun Money,” which is money to go out with friends, get your nails done, buy that new dress you’ve been wanting etc. But neither of you may criticize the other’s use of that fun money. That’s the point. Use it as you will — in the way that gives you the most utility. (P.S. We allow fun money to roll over month to month).

But What If We’re Not On Salary?

My husband is self-employed, and his salary varies GREATLY each month. He has committed to a number he will be able to make, and if he doesn’t meet that expectation one month, I still get the same “salary.” He will make it up the next month (we have another permanent “rainy day fund” to even it out, which is also where the $200/mo savings are going). If he consistently doesn’t hit or exceeds the target (probably 2-3 months), then we will adjust my "salary" up or down as needed.

My Stewardship

Everything under my stewardship is on the left hand side. Since I’m taking care of the house/kids and almost all small purchases, it makes sense that I will have stewardship over how much we allot for birthday presents and groceries.

I see two main options for my side:

#1 The First Option is to use the “Envelope” method, I can withdraw all of my “salary” from the bank each month and then put cash into each of the envelopes. Or use a debit card and keep track with a simple excel sheet online. Each of these envelopes accumulates month after month so that your Christmas envelope will be full by December and you will have $40 in the car maintenance to get your oil changed quarterly. This method is going to work well for a lot of detail-oriented, planning-focused people, or anyone who is okay to budget traditionally.

#2 The second option is to know that when the money is gone, it’s gone. Each month I can vastly change my priorities and spend a ton on a new juicer one month and then take care of the car maintenance all the next month, working in big chunks. I don’t count dollars for groceries, and I might go over. That money has to come from somewhere though, so maybe I don’t buy any clothes that month.

*This month (January) I chose this method, but I might switch to the envelope method soon. As much as I like the “free-flow” method, when Christmas comes, I’ll want to have some money saved up so I think planning ahead is a good idea.

Increase Your Income

Keep in mind that either one of you can, at any time, increase your income by opening an etsy shop, mowing lawns, selling stuff on craigslist, opening a business....and MANY more things. Have fun!

Why It Works for Us

I can’t tell you how freeing this system is for me! I end up spending money wisely, yet it feels like I have control. I don’t have to ask his permission (in the past when he was in charge of all finances, it was necessary for me to ask permission because I didn’t know how much I had already spent that month). He loves it because he was already doing the bills, but now he has a wife who will not exceed her budget. This system might not be a win-win for you and your spouse, but it sure is for us! Either way, I would suggest please come together and work to find a solution, frustrating finances will not contribute to your marital happiness.